Menekse Gencer: Mobile money for farmers in Africa

Farmers in Africa have a new tool to help them with their crops. They’re using their cell phones for banking services – for example, making and receiving payments, and purchasing insurance. It’s a revolutionary use of technology that’s transforming how people in the developing world interact with money. EarthSky spoke with Menekse Gencer, a leading innovator who is making this happen. She founded the company Mpay Connect, which helps clients in emerging markets like Africa launch mobile money services, basically payments through their cell phones.This interview is part of a special EarthSky series, Feeding the Future, produced in partnership with Fast Company and sponsored by Dow.

Menekse Gencer told Earthsky:

More people in the world have access to mobile phones than they have to running water, electricity, or even toilets. When we look at the smallholder farmers… they’re the ones who live the furthest away from everything. Therefore the only access they’re going to get for financial services is not going to be with the bank branch. It’s going to be through the mobile phone.

In the fields far from banks, mobile money allows farmers access to a wide variety of services they might only find in the city, said Gencer.

Some of the dimensions would include, for example, having enough income to purchase food. It could mean being able to have access to things like insurance or credit so that you can invest and do farming tools or mitigate against catastrophic events, so that, if you are a farmer, you can have better crop outputs or you can have a safety net in case something happens.

So when we think about it, it becomes quite important when we look at the base of the pyramid — the poorest of the poor in the world — that lowest segment, the poorest segment represents about 80 to 85 percent of all smallholder farms. So they make their money off of farming. And today, they have no access to any kind of credit, savings, or insurance or electronic settlement.

These seeds of change are taking root for farmers in Africa. At first, farmers were skeptical of mobile money. Gencer spoke of a program in Kenya called Kilimo Salama. It launched in 2009 and provided microinsurance to about 200 corn farmers for their crops. That year, the worst drought in decades devastated Kenya and wiped out the farmer’s corn crop. Kilomo Salama compensated the farmers, and word spread. According to some estimates, by the end of 2012, 50,000 Kenyan farmers will use mobile microinsurance. Gencer said:

And so one of the things that somebody might ask is, well, okay, somebody gets paid into their electronic account. What happens after that? How do they access those funds?

One of the important things to understand around mobile money is that they’ve created this new system of essentially human ATMs. And what that means is that in roughly 90 percent of the world, people use pre-paid top-up instead of having post-paid, which we’re used to in this country, where we pay after the fact. They have to pay before, because nobody has access to credit.

And in order to do that, there is a series of agent networks that’s set up by these mobile operators. And they are dispersed throughout the country. It’s a massive network of individuals that have their own little mom-and-pop shops. They take the money and they top up your account. Now what they do is they take your money and credit your account or debit your money account, so they can also pay you out.

According to the World Bank, in 2012 over 15 million people in Kenya use mobile money, has which created new jobs, businesses, and opportunities for millions of people. And other countries in the Americas and Asia are preparing to launch their own mobile money services as well. For the world’s poor farmers, mobile money is making a difference.